ALTA Comments on Final Draft of New HUD-1

Last Monday, ALTA finalized a comment letter and joined two real estate industry letters to the Consumer Financial Protection Bureau on its soon-to-be-proposed revised mortgage disclosures.

In a comment letter on the final iteration of the proposed new HUD-1, ALTA urged the CFPB to reorder pages so that lenders can provide all the loan information and the settlement agent can provide the real estate transactional information. This will allow appropriate parties—those who are currently responsible for disclosing information to consumers—to do so without undue cost or expense.

Also on Monday, ALTA joined the Realtors, Mortgage Bankers, American Bankers, and five other trade associations in urging the CFPB to coordinate the new mortgage disclosures with the other new mortgage regulations, including the ability to repay/QM and risk retention/QRM rules. The trade association letter also recommended new timing requirements, with particular attention to resolving the current problem of frequently revised Good Faith Estimates. Lastly, the letter recommends that settlement agents continue to deliver the HUD-1. As the letter states, “Respectfully, we do not believe that the rules need to be revised to require that lenders themselves provide consumers with settlement disclosures. This requirement would be unduly burdensome, and would create unnecessary waiting periods for consumers needing to close their loans on a timely basis.”

ALTA joined with eleven other trade groups in a second trade association comment letter calling on the CFPB to publish an “orderly rulemaking schedule” and “advanced notice of proposed rulemaking” on the mortgage disclosures. This is a bit of “inside baseball” on the options the CFPB has to fulfill their legal mandate to combine the two forms. We are pushing for these two options because they would provide greater insight into the CFPB’s thoughts on the new rule and expectations to finalize the new HUD-1. We are not optimistic that the CFPB will oblige this request, but know that making the formal request is important should we seek political support on Capitol Hill once CFPB releases the rule.

For more information on this topic, please contact ALTA's Vice President of Government Affairs Justin Ailes (justin@alta.org).